Materialise Reports Fourth Quarter 2017 Results

The company is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.


Consolidated income statements (Unaudited)

	For the three months ended December 31			For the twelve months ended December 31
(in thousands, except per share amounts)	2017	2017	2016	2017	2016
	U.S.$	€	€	€	€

Revenue	53,648	44,733	31,477	142,573	114,477
Cost of sales	(24,808)	(20,685)	(12,858)	(62,787)	(46,706)
Gross profit	28,840	24,048	18,619	79,786	67,771
Gross profit as % of revenue	53.8%	53.8%	59.2%	56.0%	59.2%

Research and development expenses	(6,638)	(5,535)	(4,161)	(19,959)	(17,682)
Sales and marketing expenses	(12,879)	(10,739)	(9,506)	(39,109)	(36,153)
General and administrative expenses	(9,929)	(8,279)	(4,816)	(25,484)	(20,041)
Net other operating income (expenses)	2,364	1,971	1,779	5,631	6,212
Operating (loss) profit	1,758	1,466	1,915	865	107

Financial expenses	(1,720)	(1,434)	(749)	(4,728)	(2,437)
Financial income	1,293	1,078	1,002	3,210	2,039
Share in loss of joint venture	152	127	(650)	(469)	(1,018)
(Loss) profit before taxes	1,483	1,237	1,518	(1,122)	(1,309)

Income taxes	349	291	(898)	(534)	(1,710)
Net (loss) profit of the period	1,832	1,528	620	(1,656)	(3,019)
Net (loss) profit attributable to:
The owners of the parent	1,832	1,528	620	(1,656)	(3,019)
Non-controlling interest	−	−	−	−	−

Earnings per share attributable to the owners of the parent
Basic	0.04	0.03	0.01	(0.03)	(0.06)
Diluted	0.04	0.03	0.01	(0.03)	(0.06)

Weighted average basic shares outstanding	47,325	47,325	47,325	47,325	47,325
Weighted average diluted shares outstanding	48,467	48,467	47,325	47,325	47,325


Consolidated statements of comprehensive income (Unaudited)

	For the three months ended December 31			For the twelve months ended December 31
(in thousands)	2017	2017	2016	2017	2016
	U.S.$	€	€	€	€

Net profit (loss) for the period	1,832	1,528	620	(1,656)	(3,019)
Other comprehensive income
Exchange difference on translation of foreign operations	(252)	(210)	65	(691)	(1,833)
Other comprehensive income (loss), net of taxes	(252)	(210)	65	(691)	(1,833)
Total comprehensive income (loss) for the year, net of taxes	1,580	1,319	685	(2,347)	(4,852)
Total comprehensive income (loss) attributable to:
The owners of the parent	1,580	1,319	685	(2,347)	(4,852)
Non-controlling interest	−	−	−	−	−


Consolidated statements of financial position (Unaudited)

	As of December 31
(in thousands)	2017	2016
	€	€
Assets
Non-current assets
Goodwill	18,447	8,860
Intangible assets	28,646	9,765
Property, plant & equipment	86,881	45,063
Investments in joint ventures	31	−
Deferred tax assets	304	336
Other non-current assets	3,667	2,154
Total non-current assets	137,976	66,178
Current assets
Inventories and contracts in progress	11,594	7,870
Trade receivables	35,582	27,479
Other current assets	9,212	4,481
Cash and cash equivalents	43,175	55,912
Total current assets	99,563	95,742
Total assets	237,539	161,920


	As of December 31
(in thousands)	2017	2016
	€	€
Equity and liabilities
Equity
Share capital	2,729	2,729
Share premium	79,839	79,019
Consolidated reserves	(3,250)	(1,603)
Other comprehensive income	(1,803)	(1,112)
Equity attributable to the owners of the parent	77,515	79,033
Non-controlling interest	−	−
Total equity	77,515	79,033
Non-current liabilities
Loans & borrowings	81,788	28,267
Deferred tax liabilities	7,006	1,325
Deferred income	5,040	3,588
Other non-current liabilities	1,904	1,873
Total non-current liabilities	95,738	35,053
Current liabilities
Loans & borrowings	12,769	5,539
Trade payables	15,670	13,400
Tax payables	3,560	926
Deferred income	18,791	17,822
Other current liabilities	13,496	10,147
Total current liabilities	64,286	47,834
Total equity and liabilities	237,539	161,920


Consolidated statements of cash flows (Unaudited)

	For the twelve months ended December 31
(in thousands)	2017	2016
	€	€
Operating activities
Net (loss) profit of the period	(1,656)	(3,019)
Non-cash and operational adjustments
Depreciation of property, plant & equipment	8,630	6,420
Amortization of intangible assets	4,001	1,954
Share-based payment expense	1,033	977
Loss (gain) on disposal of property, plant & equipment	25	(149)
Fair value contingent liabilities	−	(455)
Movement in provisions	61	18
Movement reserve for bad debt	502	77
Financial income	(381)	(172)
Financial expense	1,597	983
Impact of foreign currencies	302	(400)
Share in loss of a joint venture (equity method)	469	1,018
(Deferred) Income taxes	534	1,712
Other	(22)	(78)
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables	(6,510)	(6,465)
Decrease (increase) in inventories	(984)	(2,482)
Increase in trade payables and other payables	3,854	9,086
Income tax paid	(1,569)	(530)
Net cash flow from operating activities	9,886	8,495


	For the twelve months ended December 31
(in thousands)	2017	2016
	€	€
Investing activities
Purchase of property, plant & equipment	(27,668)	(12,237)
Purchase of intangible assets	(4,345)	(2,342)
Proceeds from the sale of property, plant & equipment & intangible assets (net)	221	1,928
Acquisition of subsidiary	(27,173)	−
Investments in joint-ventures	(500)	−
Interest received	281	11
Net cash flow used in investing activities	(59,184)	(12,640)

Financing activities
Proceeds from loans & borrowings	54,319	14,669
Repayment of loans & borrowings	(11,904)	(2,796)
Repayment of finance leases	(2,947)	(1,898)
Interest paid	(955)	(630)
Other financial income (expense)	(472)	(79)
Net cash flow from (used in) financing activities	38,041	9,266

Net increase of cash & cash equivalents	(11,257)	5,121
Cash & cash equivalents at beginning of the year	55,912	50,726
Exchange rate differences on cash & cash equivalents	(1,480)	65
Cash & cash equivalents at end of the year	43,175	55,912


Reconciliation of Net Profit (Loss) to EBITDA and Adjusted EBITDA (Unaudited)

	For the three months ended December 31		For the twelve months ended December 31
(in thousands)	2017	2016	2017	2016
	€	€	€	€

Net profit (loss) for the period	1,528	620	(1,656)	(3,019)

Income taxes	(291)	898	534	1,710
Financial expenses	1,434	749	4,728	2,437
Financial income	(1,078)	(1,002)	(3,210)	(2,039)
Share in loss of joint venture	(127)	650	469	1,018
Depreciation and amortization	4,489	2,280	12,631	8,374

EBITDA	5,955	4,195	13,496	8,481

Non-cash stock-based compensation expense (1)	36	260	1,033	977
Acquisition-related expenses of business combinations	343	−	609	−

ADJUSTED EBITDA	6,334	4,455	15,138	9,458

(1)		Non-cash stock-based compensation expenses represent the cost of equity-settled and cash-settled share-based payments to employees.


Segment P&L (Unaudited)

(in thousands)	Materialise Software	Materialise Medical	Materialise Manufact- uring	Total segments	Unallocated	Consoli- dated
	€	€	€	€	€	€

For the three months ended December 31, 2017
Revenues	10,468	11,842	22,394	44,704	29	44,733
Segment EBITDA	4,619	2,158	1,905	8,682	(2,727)	5,955
Segment EBITDA %	44.1%	18.2%	8.5%	19.4%		13.3%

For the three months ended December 31, 2016
Revenues	8,078	10,061	13,326	31,465	12	31,477
Segment EBITDA	2,949	656	1,438	5,043	(848)	4,195
Segment EBITDA %	36.5%	6.5%	10.8%	16.0%		13.3%


(in thousands)	Materialise Software	Materialise Medical	Materialise Manufact- uring	Total segments	Unallocated	Consoli- dated
	€	€	€	€	€	€

For the twelve months ended December 31, 2017
Revenues	35,770	42,841	63,712	142,323	250	142,573
Segment EBITDA	13,926	4,400	4,967	23,293	(9,797)	13,496
Segment EBITDA %	38.9%	10.3%	7.8%	16.4%		9.5%

For the twelve months ended December 31, 2016
Revenues	30,122	37,910	46,406	114,438	39	114,477
Segment EBITDA	10,130	894	3,848	14,872	(6,391)	8,481
Segment EBITDA %	33.6%	2.4%	8.3%	13.0%		7.4%


Reconciliation of Net Profit (Loss) to Segment EBITDA (Unaudited)

	For the three months ended December 31		For the twelve months ended December 31
(in thousands)	2017	2016	2017	2016
	€	€	€	€

Net profit (loss) for the period	1,528	620	(1,656)	(3,019)
Income taxes	(291)	898	534	1,710
Finance cost	1,434	749	4,728	2,437
Finance income	(1,078)	(1,002)	(3,210)	(2,039)
Share in loss of joint venture	(127)	650	469	1,018

Operating profit	1,466	1,915	865	107

Depreciation and amortization	4,489	2,280	12,631	8,374
Corporate research and development	490	472	2,017	1,673
Corporate headquarter costs	2,706	1,781	9,690	8,646
Other operating income (expense)	(469)	(1,405)	(1,910)	(3,928)

Segment EBITDA	8,682	5,043	23,293	14,872

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